Fertitta Balks at $6B Commanders Price Tag, Out of Contention for NFL Team

Posted on: April 13, 2023, 08:50h. 

Last updated on: April 13, 2023, 09:30h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Golden Nugget boss Tilman Fertitta says he bid $5.6 billion for the NFL’s Washington Commanders, but he doesn’t believe $6 billion is the appropriate price point for the franchise. That likely means he’s out of the running to own the team.

Fertitta Commanders
Tilman Fertitta in a 2020 interview. He’s likely out of the running to own the Washington Commanders. (Image: CNBC)

Reports surfaced in February that Fertitta offered slightly more than $5.5 billion for the Commanders, well below the $6 billion current owners Dan Snyder and his wife Tanya are hoping to fetch. At that time, his offer was viewed as credible because it was widely believed the only suitor that could afford $6 billion was Amazon founder Jeff Bezos to whom the Snyders would be unlikely to sell the team.

Bezos owns the Washington Post, which along with an array of other media outlets, has published articles painting an unflattering picture of Commanders’ culture under Snyder’s ownership.

In a Wednesday interview with CNBC, Fertitta confirmed he offered $5.6 billion for the NFL franchise, the value Forbes lists the team at.

At some point you’ve got to draw a line in the sand on everything and that’s where we are. If they can get somebody to pay them more than that, good luck to them,” he said in the interview. “That’s all I can say. I own a franchise, so I love them selling for a lot. But at some point, I don’t think $6 billion is the right number.”

Fertitta owns the NBA’s Houston Rockets. His Fertitta Entertainment Inc. (FEI) controls the Landry’s restaurant empire and the Golden Nugget casinos. The group owns more than 600 restaurants across the Bubba Gump’s, Chart House, Del Frisco’s, Mastro’s, and Morton’s brands, among others.

It’s Not the List Price, It’s What a Buyer Will Pay

Fertitta is no stranger to mergers and acquisitions in the gaming and restaurant industries. As such, he’s undoubtedly familiar with the notion that an asset’s listed value often differs — higher or lower — from what a buyer is willing to pay.

The 2022 Forbes listing of the world’s 50 most valuable sports franchises ranks the Commanders eighth, tied with the NBA’s Golden State Warriors at $5.6 billion. If someone other than Bezos ponies up $6 billion for the Commanders, the Snyders could be compelled to make a deal happen. It’s unlikely to be with Feritta.

“Everybody that’s watched me do business for the last 40 years knows when I draw a line in the sand, I’m done. So, I’m here, you know I can close and that’s the way it is,” he told CNBC.

With Fertitta out of the running and the Snyders not keen on working with Bezos, a group led by Josh Harris, who owns the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils, and Canadian real estate billion Steve Apostolpoulos appear to be the front runners to win the NFL team.

Scarcity Premium is a Factor

As a current owner of a team, Fertitta knows that the scarcity premium factors into the equation for buyers and sellers of these assets. There are only so many teams to go around and they rarely come to market, leading to elevated prices.

That’s to say, if the Commanders sell for $6 billion, the next NFL team to be put up for sale is likely to garner a significantly higher price tag.

As it stands today, if the Snyders get the desired $6 billion for the team formerly known as the Redskins, the price would represent a 33% premium over the $4.5 billion that was paid for the Denver Broncos last year.